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Seven Companies Bid For 11 Contracts In Colombia Oil Auction

(Reuters, 4.Jun.2019) — Seven companies have
put in bids for 11 oil exploration contracts in Colombia, the government said
on Tuesday, as the Andean country seeks to revitalize its oil sector.
Frontera Energy, Geopark, Ecopetrol , Hocol, Parex Resources, Gran Tierra
Energy and ONGC Videsh have put in a total of 19 offers, the national
hydrocarbons agency said. Ten of the blocks are onshore and one is offshore.

At least 22 companies were qualified to bid on
20 blocks on offer in the auction. Results of the bidding are expected in
mid-July.

“For the first time in the history of Colombia
an offer of blocks has obtained 55% success,” said agency head Luis Miguel
Morelli.

Qualified companies which did not bid will have
access to competitors’ offers and can present alternative ones, Morelli said.

Other qualified bidders include CNE Oil and
Gas, Occidental Petroleum, Hunt Overseas Oil Company, Amerisur Exploracion,
Mansarovar Energy and Noble Energy.
State-run Ecopetrol and its subsidiary Hocol put in the best bids on five of
the 11 blocks, Ecopetrol said in a statement later on Tuesday.

Ecopetrol bid for the offshore GuaOff-10 block,
it said, while Hocol placed a bid on the COR-9 block. Hocol also bid on the LLA
86, 87 and 104 blocks in partnership with Geopark.

“The best offers presented today in Bogota put
Grupo Ecopetrol in first place for eligibility in this phase of the process,”
the statement said.

Colombia expects to receive some $1.5 billion
in oil investment over the coming months from this round of bidding as well as
a recently launched permanent bidding process, Morelli has said.

The government hopes the new process and
modified contractual terms for offshore exploration will boost its
long-stagnant oil sector. Offshore and onshore exploration ground to a halt
when global prices slumped.

Companies including Royal Dutch Shell, Noble,
Exxon , Repsol and Parex have already signed on to operate new blocks this
year.

The country’s crude reserves were up 9.9% last
year to 1.96 billion barrels, or equivalent to 6.2 years of output. The
government wants to increase reserves to at least 10 years equivalent.

Average oil production is 865,000 barrels per
day, half of which is exported.

Ecopetrol said last month its crude exports to
the United States rose nearly 25% in the first quarter because of lower supply
from neighboring Venezuela and higher production.